Reply #7: Peak Oil Is Primarily An Economic Event

[Strelnikov_]

Demand for a price inelastic commodity chasing too little, and eventually declining, supply. Price transients will wreak economic havoc similar to the 70' shocks. A persistent recession will ensue.

But it is the thermodynamic aspect of peak oil that will lead to the 2nd Great Depression. As the decline in conventional oil accelerates, EROEI (thermodynamics) will at a minimum severely depress, and possibly destroy, capitalist economies.

All of the post-peak supply mitigation options have net energy returns well below those of even today’s conventional oil. This means we will have to work hard just to replace the Quads of conventional oil energy lost. Growth in energy supply will not be possible, therefore economic growth will also not be possible.


And throwing more money at the problem will not make it go away. We are talking an energy source, after all. At some point, the energy obtained is less than the energy invested, making continuation pointless from a societal standpoint.